Valve has revealed the Steam Box, now known as Steam Machines, in an effort to take over so-called living room gaming.

Steam Machines are “a powerful new category of living room hardware,” according to the company. It is planning a hardware beta for this year. In 2014, a variety of vendors will release many different set-top boxes under the Steam Machine brand.

Valve, a developer and digital-game distributor, will first make its own version of the hardware as a guideline for others.

“While these products are still in development, we need your help,” reads Valve’s announcement. “As always, we believe the best way to ensure that the right products are getting made is to let people try them out and then make changes as we go. We have designed a high-performance prototype that’s optimized for gaming, for the living room, and for Steam. Of course, it’s also completely upgradable and open.”

This year Valve will ship 300 of these boxes to Steam users, free of charge, for testing.

Valve is one of the biggest names in digital distribution for PC gaming. Its Steam service produces millions in revenue for the company by selling its and third-party titles to PC gamers.

After dominating desktop and laptop computers, Valve is eyeing the living room for the next Steam invasion.

On Monday, Valve announced SteamOS, its new Linux-based operating system. Valve will offer SteamOS to individuals and vendors for free. The company hopes this will serve as the backbone for its living room gaming strategy, where people play video games away from their desktop or laptop computers and also use the console to watch movie and television content. While Valve waits for more companies to support Linux gaming, SteamOS will support in-home streaming that can enable a Windows or Mac computer to stream games to a set-top box running the new operating system.

With the Steam Machines, Valve will go up directly against companies like Nintendo, Microsoft, and Sony, although it is taking a much different strategy. If the console manufacturers are an Apple-like walled garden, then Valve’s Steam Machines are an open — and potentially fragmented — market like Android.

Valve isn’t providing any images of its prototype Steam Machine at this time, but it claims it will provide more info soon. It will ship its own box this year but just to that aforementioned tiny test audience.

The company also assures traditional Steam users that the core PC version of Steam will continue to push forward as it always has.

Gabe Newell believes that children are the future … wait, no — scratch that. He believes that Linux is the future of gaming. His stance regarding children and the future is still unknown.

Newell, managing director of gaming company Valve, spoke at the LinuxCon event in New Orleans today. During his speech he told the attendees that he expects the open-source operating system to play a bigger role in gaming, as reported by Ars Technica.

“It feels a little bit funny coming here and telling you guys that Linux and open-source are the future of gaming,” Newell told the crowd of assembled Linux devotees. “It’s sort of like going to Rome and teaching Catholicism to the pope.”

During his LinuxCon speech, Newell talked about how Valve is working to get PC gaming on more TVs and, as a part of that, he teased what sounds like the Steam Box.

“Next week we’re going to be rolling out more information about how we get there and what are the hardware opportunities we see for bringing Linux into the living room,” Newell said.

The Valve boss also spoke at length about the problems developers face in porting games to Linux. He explained that in porting games like Left 4 Dead 2 and the Steam service itself, they produced a roadmap that other studios can follow. Additionally, Valve is codeveloping a debugger for Linux that many developers have asked for.

“When we talk to developers and say, ‘If you can pick one thing for Valve to work on the tools side to make Linux a better development target,’ they always say we should build a debugger,” said Newell.

Valve got its start developing PC games for Windows like Half-Life and Half-Life 2. The company slowly moved into distribution with the release of Steam, which is now one of the biggest digital-distribution channels for PC games in the world.

In July 2012, Newell famously called Windows 8 a “catastrophe for everyone in the PC space.” He reasoned that Microsoft’s focus on the proprietary and walled Windows Store was a bad omen for the open nature of PC development. Linux, with its commitment to open-source, would prohibit problems along those lines.

Normally, we video game guys don’t have to work too hard when it comes to covering consumer electronics. We have a few consoles, a few handhelds, maybe a few peripherals here and again, but it’s nothing like the crazy world of phones and tablets … or at least it wasn’t.

This year, something happened: We started getting video game consoles from companies other than Nintendo, Sony, and Microsoft.

These alternative gaming devices, sometimes called microconsoles, come in all shapes, sizes, and flavors. You want to stream your games like Netflix? You can do that. Want to play Android-based games on a tablet with controls built into a handle? That’s a thing. Want Valve’s Steam experience on your television? It’s happening.

But it’s damn hard to keep up with everything. How do they work? What kind of games will they run? How much do they cost? OK — I’m panicking now just thinking about putting all of this information together for you … but I did.

We’ll try to keep this easy. Let’s get started.

Android-based microconsoles

Ouya is the single biggest reason I’m explaining all of this. When the tiny console box launched on Kickstarter — and raked in over $8 million from backers — it created more questions about the future of gaming than it answered.

The basic concept of Ouya is that it will bring the open platform of Android to the television. It accomplishes this by providing a cheap box that has the guts of a smartphone but doesn’t rely on touch-screen controls. Instead, it comes with a physical controller with buttons, analog sticks, and everything else that gamers require to run persistently in an ever-scrolling world.

The console plays Android games, most of which aren’t designed for a controller, so Ouya is also a digital-distribution platform that will showcase original games optimized for the platform (and Android games developers redesigned with physical controls).

On top of that, Ouya’s creators also promise the device is completely open to hacking. That means emulators and piracy. A good chunk of consumers may get something like Ouya just to play classic Super Nintendo games on one of the many Android emulator apps. A bunch more might get the system and pirate Android games (not that the developers can’t fight back on Ouya).

For Ouya to succeed, it will have to build a library of games that convince a portion of the audience to get their software directly through the new microconsole. This is possible.

As of late May, the microconsole currently has over 125 games.

Ouya is about to ship out to consumers in just a few months. It could easily launch with games like Minecraft Pocket Edition and others that already have full controller support.

The little Android has a few months to prove it’s worth the HDMI input it’s taking up on your television, otherwise people are likely to forget it as the new consoles come pouring down and wash it away.

Take everything I wrote about Ouya and apply it to GameStick. It’s nearly all the same, but the GameStick is smaller than Ouya and $20 cheaper.

This thumb-drive-sized HDMI device uses Android. It has smartphone-like components. It comes with a physical controller. It has its own digital distribution platform.

The main difference between Ouya and GameStick is that PlayJam, the company behind this tiny device, is a game developer first. That could mean the GameStick will have better software support. It’s also possible that it is less powerful than Ouya, but both can probably handle similar software.

Android-based tablet-controller hybrids

Now things start getting weird. We went full hands-on with Nvidia’s Shield Android handheld at the Consumer Electronics Show. It’s an impressive gaming device with some seriously cool features.

Nvidia’s handheld looks like an Xbox controller with a TV jammed into it. It features the company’s next-gen Tegra 4 processor and a 5-inch touch screen that flips up during gameplay.

It’s another controller-focused take on Android gaming. It has an HDMI port, so gamers can plug it into their televisions and use it just like Ouya. Developers are gonna have a lot of options if they want to make a mobile game that supports physical buttons.

But Project Shield has something Ouya and GameStick do not: The ability to stream games from your PC directly to the portable unit. This doesn’t mean you’ll be playing The Elder Scrolls V: Skyrim on the bus, but your PC could feed games to the system if you’re sitting on your couch. In that way, the device is a lot like a Wii U GamePad controller for the PC. Only instead of New Super Mario Bros. U, gamers can tap into their entire Steam libraries.

At $350, it is more than triple the price of the other two Android microconsoles, but it is also much more powerful and full of features.

Wikipad is the name of the company and the product. The device is a 7-inch Android-based tablet that comes with a game-controller dock. This shell adds analog sticks, face buttons, and shoulder buttons to what is otherwise a pretty standard Android slate. Those controls, however, allow for precision gaming in titles from both the Google Play market and the PlayStation Mobile Store.

Sony provides a lot of classic PlayStation titles on its Android store, and a system with physical controls is the ideal way to experience them. Only Sony-approved devices can access its store, so hopefully GameStick, Ouya, and Project Shield can get on that list.

Wikipad originally planned to launch a 10-inch tablet in late 2012, but that never materialized. Now, it’s struggling to get its Tegra 3-powered Wikipad 7 out to consumers before the tech ages out of viability. Even if the company does get it out before the end of June, it probably won’t catch on with gamers.

You would think that the delays would have led to a better result. This thing is gonna have a hard time as it is, but against a potentially better-designed Nvidia product running a next-gen graphics chip … well, I don’t like its chances.

It’s called Razer Edge. It’s a 10-inch Windows-based gaming tablet with screaming hardware. The $999 “basic” version starts with a Intel Core i5 1.7 GHz processor that can overclock to 2.6 GHz. It has 4 GB RAM, 64 GB SSD, and a GeForce GT 640M graphics card all packed into something not much bigger than a standard tablet. The $1299 Pro model upgrades the system to a Core i7, 8 GB RAM, and 128 or 256 GB SSD.

A rig with the Edge’s specs can run Skyrim at around medium to high settings. That’s not bad for a portable device.

Add $200 to the price and it comes with a controller dock similar to the Wikipad. Razer Edge also has a keyboard dock for traditional gaming and a living-room dock with a plethora of inputs and outputs. Just like most things on this list, the Razer Edge can connect to your TV, work with wireless controllers, and replace your console.

Valve-approved Windows/Linux-based Steam Box things

The Steam Box is something much more nebulous than the Xi3 Piston micro PC, but it gives us a good idea of what Valve wants.

Valve is pushing the idea of a TV-connected gaming PC pretty hard. The Xi3 is a result of that. Valve put some money into Xi3 and is definitely experimenting with the company’s hardware. We’ll get into what exactly Valve is doing with the Steam Box as a whole in the very next section, but let’s explain the Piston first.

The Piston is a tiny little powerhouse. It’s a small cube-like device with a 3.2 GHz quad-core processor from AMD that packs the graphic processor on the same chip. It has 8 GB of RAM and up to 1 TB of storage capacity.

You’re supposed to plug this thing into your TV and run Steam in Big Picture mode, the interface the company designed for television displays, and that’s it. You have a Steam console.

The Steam Box

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Valve is working on a piece of hardware all their own. It is a Linux PC that will plug into your TV, but the company is also inviting others to do the same. If those companies want Valve’s help, Valve will help.

The software giant is going for a three-tiered strategy with the so-called “Steam Box.” Valve chief executive officer Gabe Newell called it a “good, better, and best” model in his interview with The Verge.

The “good” solution involves streaming devices. Not something like OnLive or Netflix that streams the data from some centralized location out to your house, but something that streams the games from your gaming PC to your television. Nvidia revealed a graphics card called Grid that is capable of something like that at CES.

The “better” solution is the one that Valve will release. It has a dedicated CPU and GPU. It doesn’t have a physical-media player. It’s small and quiet. It runs Linux, it has its own controller, and Valve will sell it itself. It is a lot like the Xi3 Piston.

The “best” solution is the craziest, most expensive rigs you can think of. They have all the bells an whistles. They run big, hot, and loud. They aren’t even really Steam Boxes.

For those that don’t remember, OnLive is Netflix for video games. Gamers can stream full console games, like BioShock or Saints Row: The Third, to their PC, tablet, phone, or television without any serious hardware.

For the television, OnLive released a microconsole that can zap the digital platform right to a television. It works surprisingly well, but it the occasional lag is enough to keep it from fully replacing a dedicated gaming system.

Turns out your phone is already a console

The thing about the Ouya and the GameStick is that they’re just focusing on a feature that your Android smartphone is already completely capable of. The Ouya plugs into your television and is compatible with a physical controller. You can do that with a Nexus 4, Samsung Galaxy S III, or an HTC DNA.

MHL cables allow people to connect a phone to a television HDMI input. Then some Android apps allow players to use a PlayStation 3 or Wii controller to interact with games. It’s a cheap and easy solution that basically amounts to the same thing as Ouya.

Of course, Ouya may encourage more developers to produce controller friendly games, but those titles are compatible with standard Android phones.

Green Throttle takes the idea of MHL cables a step further. The company designed its Atlas controller to work with Android phones. It sells the controllers in bundles with the cables required to connect your smartphone to the television.

Green Throttle wants players to use their phones as a console and they want them to use the Atlas to interact with it. The company has its own proprietary digital-download store similar to Ouya and GameStick. With this device, your phone truly is almost no different from either of those dedicated consoles, and it is probably more powerful than at least the GameStick.

If you want a PC as your gaming console, you’re gonna need a bigger wallet.

PC manufacturer Xi3 revealed that the base Piston will start at $1,000. It features a 3.2 GHz AMD quad-core processor with 8GB RAM and 128GB SSD — but no dedicated graphics card. At $1,339.99 and $1749.99, you get 256GB and 512GB of storage, respectively. Customers who preorder before March 18 will get $100 off the aforementioned prices, and Xi3 guarantees those gamers will receive it before the end of 2013.

“Clearly, the computer/video gaming market is huge, both in the personal computer and traditional console markets,” Xi3 chief executive officer Jason Sullivan said in a statement. “That being said, we believe there is a crying need for a machine that captures the best of both worlds, with the upgradeability of computer gaming rigs and the design and form factor of consoles. We believe our Piston Consoles do exactly that — deliver the beauty and small size of consoles with the upgradeability of computers.”

In January, Xi3 revealed that Valve invested in the project and was performing some “exploratory work” for the eventual Steam Box. Valve is still working on its own Steam Box, which brings the company’s Steam PC gaming experience to the television, but it will continue to work with partners who wish to release their own takes on the concept.

This will create a whole category of Steam Boxes, and the Piston is the first in that category.

Sony, Nintendo, and Microsoft have owned gaming on the television for a number of years, and now Ouya and GameStick are attempting to bring Android gaming to the big screen. Valve chief executive Gabe Newell claims he isn’t worried about any of those companies as much as he is Apple, but then Sony and Microsoft probably aren’t too worried about a $1,000 PC gaming console, either.

Premier game developer Valve shook the electronic entertainment world on Monday when it said that it had was working on its own open system console, which the press has dubbed the “Steam Box.” Rumors had been building for some time, creating huge excitement.

Gabe Newell, chief executive of Valve, acknowledged in an interview with The Verge that his company was working on the Steam Box and had invested in Xi3, which has a new gaming PC, called Piston, on display this week at the Consumer Electronics Show in Las Vegas.

We interviewed David Politis, chief marketing officer at Xi3, a maker of modular computers that can be used either as server computers, regular PCs, or gaming PCs. Piston can run either Linux or Windows.

To be clear, the Piston computer pictured is probably not the exact same thing as the Steam Box, which in pictures looks very different. However, Xi3 is able to pack a lot of firepower in this little device. That makes the Piston’s specifications and general size a proxy for whatever Valve finally ships. Newell said that the Steambox will run the Linux operating system.

Politis showed us an exclusive case (pictured at top) for the machine, which can be configured with any kind of design on its shell cover. We looked around but didn’t see any cases with the name Steam Box on them. But note the thematic similarity of the names “Piston” and “Valve.” Wink, wink. Politis acknowledged that Valve has invested in Xi3, but he said he couldn’t talk about a Steam Box and has a non-disclosure agreement with Valve.

At CES, Xi3 unveiled the 7A series game machine coming this spring.

The specifications

Piston packs a lot of muscle in a tiny space. It fits in a box no larger than the size of your hand. The device uses the Advanced Micro Devices “Trinity” combo platform which combines a microprocessor and graphics functions in the same chip.

The machine has a 3.2-gigahertz quad-core microprocessor and 384 programmable graphics cores. It comes with 8 gigabytes of DDR main memory. It can support three monitors natively and two mini display ports. It has four USB 3.0 ports, four eSATA ports, and four USB 2.0 ports. And it has 64 gigabytes to 1 terabyte of storage, depending on price. It has three programmable audio ports. The storage can transfer data at a speed of 12 gigabits a second at the high end.

The device can run 4K resolution video and graphics. Piston consumes only 40 watts, compared to 1,000 watts for some of the high-end game PCs.

“You can use this for gaming,” Politis. “To fit it inside this form factor took a little bit of magic.” The device has 13 patents granted and the company has applied for 1,000 more.

One of the most interesting aspects is its modularity. You can pull apart the chassis by removing four screws. You can then snap out the circuit board (above left) and replace the central processing unit. You can also wire multiple devices together in a server rack for high-end data center processing (pictured right).

But this machine isn’t going to be cheap. It will cost $999 — higher than its earlier Series 6 version that currently sells for $499. Politis said Piston will ship in March. Newell told The Verge that he wanted a machine that is quiet and without a big optical media drive. The Steam Box has to have low latency and be open. Newell described Windows 8 from Microsoft as “unusable.” He said that the Steam Box will run a regular web browser and be able to access services like Netflix via the web.

Valve is working on a new set-top gaming system standard based on PC architecture dubbed “Steam Box,” according to a report published by website The Verge, A standout feature is rumored to be a controller that could provide real-time biometric feedback from the player to the game. For example, a shooter would be able to adjust the intensity of the action based on the player’s pulse rate.

[Update: Valve has dismissed the rumor]

The alleged baseline specifications for the Steam Box include 8GB of RAM, an Intel Core i7 CPU and an unspecified Nvidia graphics chip. Making use of current PC technology means the system could be compatible to thousands of existing Windows games. Valve has allegedly been talking to potential hardware partners – like Dell subsidiary Alienware – to manufacture the device. If true, the move would shake up console platforms and potentially position Valve as a major alternative hardware provider.

Former Microsoft employees Gabe Newell and Mike Harrington founded privately-owned Valve in 1996. The company’s first product was the classic first-person shooter Half-Life, which also spawned the online phenomenon Counter-Strike. The company still publishes games, most recently Portal 2, and also operates the digital content distribution platform Steam. Since its launch in 2004, Steam has become the dominant online service for buying PC and Mac games and has over 35 million active user accounts, according to Valve. Electronic Arts launched the competing Origin platform in 2011.

Valve’s large number of existing Steam customers would make it a formidable competitor for the traditional game console makers Microsoft, Nintendo and Sony. But there are a number of reasons why we are not exactly convinced by the report’s rumors.

Historically, licensing game platform standards to third-party manufacturers hasn’t worked out. The system graveyard is filled with once hopefuls that never caught on. Rest in peace, 3DO, CD-i and Nuon.

In an era where the future of dedicated game consoles is questioned, exhuming the old ‘let’s put current PC technology into a box for the living room’ idea evokes unpleasant memories of The Phantom, a 2004 PC console announcement that never transformed into a finished product.

And who is really thrilled about the idea of playing with some sort of bracelet attached to send biometric feedback to a game console? Most living room dwellers don’t even want to be bothered with putting on glasses to make use of 3D TV sets.

According to The Verge, Valve has demonstrated a prototype of the Steam Box device to potential partners in January during the Consumer Electronics Show (CES). It’s rumored the system could be revealed as early as the upcoming Game Developers Conference (GDC) in San Francisco, or be held back until June for the Electronic Entertainment Expo (E3).